BVI Offshore Business: Grey Area

The Australian company Trio Capital, whose hedge fund known as Astarra Strategic Fund made $118 million investments through the British Virgin Islands-registered company EMA International, could not provide detailed information about the assets repatriated to overseas hedge funds.

By words of Neil Singleton, an executive with the administrators PPB (appointed by Trio’s directors after regulators froze their funds in October 2009), there was lack of information about BVI company’s assets.

Information provided by Trio Capital shows that more than $233 million of investors’ money is placed within the managed investment schemes, including the BVI company - more than $100 million more than ASIC’s initial estimates of $126 million. Also, PPB investigators found high level of inter-related investments between the schemes.

Astarra Asset Management was the investment manager to Astarra Strategic Fund. Its creditors include Trio Capital, with a loan document stating Trio Capital is owed up to $1.5 million under a complex arrangement with Astarra Asset Management.

The Australian Securities and Investments Commission revoked Trio’s licence to operate its 24 managed investment schemes. Some days after that, a liquidator was appointed to Astarra Asset Management after a meeting passed special resolution citing a “voluntary winding-up by creditors”.

The Australian Prudential Regulation Authority appointed a trustee to manage the $300 million the company holds in its funds, and stopped it receiving further cash inflows.